California Utilities Plummet On Wildfire Fears (#GotBitcoin?)
Shares of PG&E and Edison International Hit Hard as concerns grow over potential liability from the fires.
Shares of two of California’s largest utilities plunged Monday as concerns escalated that the companies could face billions of dollars in potential liabilities as a result of the state’s latest devastating wildfires.
PG&E Corp.’s stock price was down about 16% in midday trading after falling as much as 37% earlier in the day. Shares in Edison International which owns Southern California Edison, were down about 10% after falling more than 20% earlier Monday.
Both utilities’ share prices began plunging late last week as wildfires in northern and southern California left thousands of customers without electricity and gas. The fires have killed more than 30 people and burned more than 6,000 homes.
Analysts said the selloff reflected investor concerns about the companies’ exposure to fire-related damages, which were already a major source of risk for the companies after deadly blazes last year, some sparked by utility equipment, led to lawsuits. The causes of the current fires, now spreading in Northern California about 100 miles north of Sacramento, and in Southern California in Ventura County northwest of Los Angeles, haven’t been determined.
State lawmakers earlier this year passed a measure that would allow utilities to raise rates to cover liability costs after analysts, lawmakers and others raised concerns that the costs could force PG&E, the state’s largest utility, to seek bankruptcy protection.
The legislation, however, doesn’t allow for the recovery of costs related to wildfires occurring this year.
California investigators earlier this year determined that equipment from PG&E’s Pacific Gas & Electric Co. unit caused 16 of last year’s fires. The company in the second quarter booked a $2.5 billion charge related to wildfire claims, and analysts project the company could face billions more in liabilities.
PG&E supplies energy to about 16 million people in northern and central California. The company said in a statement Friday that about 25,000 of its customers were without power and 12,000 were without gas as a result of the Camp Fire near Chico.
PG&E last week warned that it might proactively shut off power in nine Northern California counties, though it decided those measures weren’t warranted.
Southern California Edison said on its website that the Woolsey fire near Los Angeles had damaged some of its infrastructure and left about 9,500 customers without power as of Sunday night.
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